The U.S. Dollar Index remained steady, stabilizing after its gains yesterday. The resilience of the U.S. economy could continue to bolster the dollar’s appeal while other economies see more challenges.
Traders are turning their attention to the Federal Reserve later today. It is expected to maintain its interest rates at current levels.
However, Jerome Powell’s speech could affect expectations regarding the direction of monetary policy for the coming months. While markets are mostly expecting interest rates to remain unchanged for the next few months, some upside risks remain.
The euro also hovered in place but remained exposed to the downside while euro area inflation data came up weaker than expected.
The slowdown in inflation in addition to the weaker-than-expected growth figures in the Eurozone could continue to weigh on the European currency while concerns continue to increase.
The British pound could see some volatility in reaction to the Federal Reserve’s decision today and tomorrow’s Bank of England meeting. The BoE is projected to maintain the interest rate at 5.25% tomorrow, amidst intensifying recession concerns in the UK.
The pound remains at risk as the BoE grapples with the dual challenges of high inflation and low growth.
The Japanese yen could continue to draw attention after breaching the 151.00 level following the Bank of Japan’s meeting yesterday. The currency could continue to see some risks in the face of a potential intervention from the BOJ.